Menzgold bows to SEC pressure; halts gold vault market services

Management of Menzgold has announced Thursday morning that it has temporarily halted its collectables and any new business related to its gold vault market with immediate effect.

According to the company, the halt of what is also called extra value payments takes effect from today Thursday, September 13 and will be in place for six days, “by which time we believe all pending issues related to the Gold Vault Market Product would have been ironed out.”

The company is hopeful the halt would not go beyond September 19, 2018.

“This decision, though very unfavorable to us has been informed by our commitment to the rule of law, absolute respect to state agents, agencies and total submission to the state,” the press release, published below, stated.

Backtrack

Menzgold had earlier vowed to defy a directive from the Securities and Exchange Commission (SEC) to stop trading in the gold collectibles without the appropriate licence.

Lawyers for the company, Kwame Akuffo and Co Unlimited have wrote to the Commission stating the “purported directive to shut down or suspend its operations untenable and is unable to comply”.

The September 7, 2018 directive from the SEC to shut down comes after SEC met with Menzgold officials in August 2018.

Menzgold was in an August 27, 2018 letter from SEC given two days to respond to queries but the gold dealership company asked for two-weeks to respond.

Although the August 29, 2018 letter for extension was received, Menzgold holds that SEC was silent about its request for an extension.

When SEC finally spoke, it was to order the company to cease the aspect of Menzgold’s business which involves purchase and deposit of gold collectibles and guaranteed returns.

A move which Menzgold has described as “bad faith” and “an unhealthy over-reach”.

According to the Commission, the aspect engaged in by Menzgold is a capital market activity under Act 929 for which the company requires a valid license to opera.

Thursday’s release from Menzgold stating its decision to halt the extra value payments is similar to a standoff it had with the Bank of Ghana in August.

Chief Executive Officer of Menzgold, Nana Appiah Mensah, had cause to apologise to the Bank of Ghana after describing it as a joke.

Mr Mensah a week earlier branded the central bank as a joke after the BoG released a public notice which stated that his company is breaching section 6 (1) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).

Menzgold had maintained that the Bank of Ghana was wrong, insisting that its operations did not come under that Act.

Regulatory agencies say the company is operating a business module that is not covered by that licence it has been given.

Read Thursday’s full release from Menzgold below

Following the notice from the Securities and Exchange Commission of Ghana issued on the 7th day of September, 2018, the Management of Menzgold Ghana limited in its bid to bring some finality to the issues once and for all has decided to place a temporal halt on all extra value payments and any new business related to our Gold Vault Market.

The halt takes effect from Thursday 13th September and will be in place for 6 days, by which time we believe all pending issues related to the Gold Vault Market Product would have been ironed out.

We are certain this halt would not go beyond the 19th day of September, 2018.

This decision, though very unfavourable to us has been informed by our commitment to the rule of law, absolute respect to state agents, agencies and total submission to the state.

We would, as usual count on your understanding and cooperation during this period. For any further clarification please call 0303 976 961 or 020 111 3287.